Mitchell in adds three Chicago restaurants to its guide and I'll talk with Crane's residential real estate reporter Dennis Rodkin about news from the local housing market, including a look at how housing shaped race in the 20th century. Black people were often kept out of not only neighborhoods, but homeownership and we know that there was redlining and there was contract buying which kept black people from ever really consummating the deal. It keeps moving the goal line so you never actually buy the house. I'm Amy Guth and this is Crane's Daily Jist for Thursday, September 12. Thanks for listening to Crane's Daily Jist. Remember, we provide a daily news brief that drops right in your inbox. It's our newsletter called the Crane's Morning 10. They're the 10 stories that will fuel a smarter workday. To subscribe, visit chicagobusiness.com/morning10. I'm joined by Crane's residential real estate reporter Dennis Rodkin, here to talk about news of the week from the local housing market. Hey, Dennis, how's it going? Great, Amy, how are you? I'm well, thanks. So we have so many stories to talk through this week. Oh, my gosh, you have been so very, very busy as ever, but this first one, you mentioned at the end of the last podcast and I've been eager to talk with you about it. And that is some reporting that you did around how housing shaped race in the 20th century. Talk to me about that. This is from a book from a University of Chicago professor Adrian Brown wrote a book called The Residential is Racial. She actually published the book earlier this year, but it came to my attention because of a podcast she did. And it's kind of an interesting thing because she talks about how a lot of the 20th century racial tools we've talked about in housing, redlining and covenants and other forms of essentially robbing black people of homeownership or the equity you can build up from homeownership. She sort of talks about how that came to help define a lot of those tools were sort of helping define what whiteness is in the 20th century. She said something I put in the story very high because I thought it really kind of brought it all home as she said in the mid 20th century housing markets whiteness was an amenity like a really nice park, which is to say, I mean, you know, I think we've talked about the example of Deerfield, very nice suburb on the North Shore that in the 1960s had a huge battle over this developers plan to build homes in the town of Deerfield. The developer was known the developer was a national company known for building homes and selling them to anybody, not just white people. And there was a huge battle and eventually what happens is the land that the developer was going to build on becomes a park. The white homeowners are arguing for, you know, actually what we need as a park, which is kind of a cheat or a run around this developer's plan. That's a very well documented story and it's one that she and I talked about in our interview and it only, I think it barely pops up into the story because there was so much to talk about from her book. Just this idea that, well, one of the things she talks about is that groups of people who in the mid 20th century may not have been thought of as white, like Eastern European immigrants, Irish, Italians, via homeownership, they could sort of identify themselves as white. Black people were often helped kept out of not only neighborhoods, but homeownership and we know that there was redlining and there was contract buying, which kept people kept black people from ever really consummating the deal. It keeps moving the goal line so you never actually buy the house. So one of the ways I can show that I'm an established, acceptable member of society is via homeownership so if I'm in one of those ethnic groups that isn't considered quite white in the mid 20th century. One of the things we do is homeownership, but another another thing she and I talked about is this idea that by sequestering black people in certain neighborhoods in particular in Chicago, which of course has an enormous history with segregation. When you when you tell black households, you can only live there. You come to sort of define race by housing in that way as well. I'm white and I live in a nice suburb. You're black and you live in a crowded, poorly maintained, often disinvested neighborhood. And that comes to be part of the way the race is described. Some of what I've said is sort of awkwardly phrased because I'm doing it off the top of my head. But what I would say is anybody who's interested in these issues should pick up Adrian Brown's book. It's really, really interesting. Part of what it does is say not because we were white, we created segregation, but segregation helped us define ourselves as white. And I know there are people out there hearing this who disagree completely. Don't buy the book. But if it's an issue that you'd like to read about and you'd like to explore by Adrian Brown's book, the residential is racial. Read it. Give us a call. Send me a tweet. I'd love to hear what people think of it. That's such a great title because it's really, it really kind of sets the tone of what you're about to read. So it is. Yeah, it does. And it's, I mean, it is, I have to say, you know, I got some push back on Twitter from people who say, you know, this is wokeness and that sort of thing. I disagree. I think, especially in Chicago, the history of housing has a very strong element of racism. We know we invented in Chicago, racially restrictive covenants and disseminated them around the country and several other mechanisms. Either came here or were intensified here. And I think if you're looking at Chicago's housing history, you really have to look at race. And this book does it in a fascinating way. She really, really digs in deep. All right, let's switch gears and talk about a Frank Lloyd Wright house that got an energy saving retrofit. This is super interesting. It is, you know, and one of the interesting things about my tenure covering this beat, you know, I've been covering real estate in Chicago since the late 19th century. I've been here forever. And there are houses I've been through multiple times. Several years ago I did a story on the baltch house, the house that Frank Lloyd Wright designed for Oscar Balch in Oak Park. And at that time it was being sold by a man who with his late wife had bought it to restore it. They did all kinds of things. It had some damage and decay but mostly it had been divided up into a two flat. Frank Lloyd Wright features that were gone. He brought all that back he and his wife until she died brought all that back. They put on the market this beautifully restored Frank Lloyd Wright house. So then in on top of his shoulders comes the next owner who says all that stuff's been done this house is in great shape. I'm going to give it a green update. I'm going to do that in part so that people can see this is something you can and should do to these historical homes restoring the light fixtures and redoing the wood brings the house forward, putting in a new kitchen as he did, opening the spaces up as he did. All that brings the house forward. But if we want to make it last even longer. Her theory was, we make it sustainable. So it's an interesting sort of layered rehab. Do one part and then this woman comes in and does another part where among other things she put in geothermal climate control, which as a lot of people know involves going to the level below the ground where air temperatures are naturally stable and pulling that air up for use in your both heating and air conditioning systems, giving them a boost at a far lower cost and it's a very sustainable method. But she did that. I don't know of other frankly great houses that have that she put on a new long term roof and beneath it put in a great layer of insulation. She said the second floor was quite cold, hard to make it warm because, you know, these houses were built at a time when there wasn't a lot of insulation. People just wore multiple sweaters in the winter. She put in a whole lot of insulation, wanted to insulate the walls as well, couldn't because it involved shoving insulation in replacing the stucco. So she didn't do that, but insulating the top. And then another thing she did that I thought was really interesting is, you know, it's a Frank Lloyd White House. It has, I think, over 90 art glass windows. Well, how do you put in, if I've got just plain sheet glass windows, it's easy to put in modern insulated versions. She couldn't do that because these are art windows. And so going back and forth with the restoration groups and others, what they finally came up with is they put a storm panel inside the window. So from the outside, you still see the art glass. From the inside, because these are placed so close, you still see the art glass, but you get a layer of insulation. And then she also ends up staining the trim to match the original trim. So you don't see that these windows have been updated. What you see is the original Frank Lloyd Wright stained glass design. She did several other things to the house that are just really, really interesting. And again, she talked to me about the idea that she's essentially picked up the baton from the previous rehabber. He did all the things you want to look at. And then she does all this 20 21st century technology. She put it on the market at $1.5 million. And that is just like the Winslow House, which we talked about a couple of weeks ago where a couple retired and made their retirement project, restoring it. This seller of the ball chouse also is asking less than she has in it, less than the total she paid to buy and rehab the house. In both cases, they've said, you know, we think of ourselves as stewards, we think of ourselves as people who want to make this house last. In one case, in the case of the Winslow House, they were really doing a lot of aesthetic repair that hadn't been done in a long time. And in this case, she was putting in these sustainable technologies. As I've said a couple of times, carry it forward into the 21st century. Really an interesting job. Yeah, for sure. Talk to me now about this lake forest house connected to the executive who led the 1990s spin off of all state from Sears. This is an interesting one. I think we talked about it when it came on the market, the man who was essentially charged with pulling all state out from Sears all state had been a unit of Sears for 60 years at the time and Sears wanted it to be a separate business. He did that. He also restored this house. This is a fascinating house. It's part of that sort of swath of Southeast Lake Forest that was dominated by the McCormick family. They all built giant estates. This was not a giant estate. This was several acres. It was for their mom. They're the second generation of the McCormick family that brought the mechanical reaper from Virginia to Chicago and then created this gigantic industrial company in Chicago. Their father dies years have passed and they end up building estates in Lake Forest and a house for their mom. Nettie Fowler McCormick, Nancy McCormick may have been running the company for a while after her husband died. When you look at the old reports, it wasn't quite right to say that a woman was running the company, but most people believe that she actually did when her husband first died and also helped rebuild the company after the great Chicago fire. She's quite a figure and they build her this house called House in the Woods. It's all hyphenated, House in the Woods by Dwight Perkins. Beautiful, absolutely gorgeous house. It's built in 1916. Dwight Perkins was the architect of many schools in Chicago. He was the architect of what we now call Cafe Brower in Lincoln Park, which had a different use prior. Really beautiful prairie houses and this one. This one's amazing. I mean, you know from that picture, you come up to sort of a colonnade at the front of the house and inside it inside this courtyard is this beautiful brick lined pond that you'd be looking at from some of the rooms inside the house when you go inside. It's got beautiful brickwork and windows, just a really great house, very sort of prairie style built in 1916. So in the '90s, they do a lot of restoration. I wasn't able to reach them and their real estate agents didn't respond, but they bought it in the early '90s. In 2022, they put it on the market at $5.3 million and then it just sold in recent weeks for $3.6 million. That is more than they paid. I did the inflation calculator because they bought it in 1993. What they paid was the equivalent of about $2.6 in 2020, $24, and they sold it for $3.6. Really a spectacular house. I don't know who bought it. I don't know if, like our friend, we were just talking about in Oak Park, they will stand on those shoulders and take the house further. No idea, but great old house. One of those great old lake forest houses, Dwight Perkins was based in Evanston, but this is a real classic lake forest house. Yeah, for sure. Well, speaking of lake forest, we have another one. There is a lake forest mansion on a historic site that has been listed for $27.5 million. This is one of those estates. This is a piece of one of those estates I was talking about. So, Nettie Fowler McCormick's house, because it wasn't that much land, is inland some, but her son, Harold McCormick and his wife, Edith Rockefeller McCormick, daughter of John D. Rockefeller. So, you've got the international harvester fortune and the standard oil fortune married. They lived in downtown Chicago, but they built this enormous estate called Villa Turicum. Turicum is another way of saying Zurich. It was Villa Zurich, basically, and they had hundreds of acres on the shoreline in lake forest. They end up not really living there. They get divorced. It's all very sensational. I've done stories about the craziness in the McCormick family. But one of the things that is left behind for decades from their estate is this grand, palatial staircase down the bluff to the lakefront. It's got fountains and curves and it's just this incredible piece of work. That is still there, but what has just sold is the third house built on the site where these lake stairs are. Villa Turicum was torn down, I think in the 1950s, maybe a little bit later. The estate had been hundreds of acres, but the footprint of that house remained empty for decades, and then in the early 80s, a couple built a new house. They kept the stair, those beach stairs. There were some other things including this long reflecting pool out front. When I wrote about that house years ago, one of the attractions was it has this reflecting pond out front and then these lake stairs out back. Well, now what we're talking about is the third house on the site. The people who bought that house tore it down. They also removed the reflecting pond and they built a gigantic mansion that they now have on the market for $27.5 million. They have the beach stairs and you saw the photos. We have one that shows this staircase going down 75 feet of bluff and it's not just a staircase. It's quite grand. It's quite grand. The house is very nice. The house is done in an Italian style. It is modern. It's not the house that Harold McCormick and Edith Rockefeller McCormick built, but you can see some similarities. You can see an attempt to do an homage to the original house, but this is quite a house, quite a property. What those beach stairs go to is this huge lake cove. It's framed by boulders so that you have a shallow and calm cove, not only for swimming, but for launching boats. It's a real Lake Michigan shoreline property and it is at $27.5 million. It's the second highest priced home on the market today in the Chicago area. Well, we're going to be talking about home prices here in just a bit, but as ever, everybody head to ChicagoBusiness.com and check out the photos of this and all the properties that we're talking about. Hey, let's talk about another mansion though. This one is built by the father of modern advertising. It is on the market for the first time since the early 1990s. Can I just say, I think I said this about Winnetka recently. I don't only cover Lake Forest. It happens that Lake Forest has been quite busy in recent weeks. And this one, this is an amazing property. I ride through here on my bike some mornings because I just sort of want to carry myself back to the days of Albert Lasker. He is fascinating. So he built a 480 acre estate west of Lake Forest. It's now actually inside the boundaries of Lake Forest, but at the time it was called Everett and it was outside Lake Forest. And the reason he did it is because of the anti-Semitism in the clubs farther east on the lakefront, on the North Shore. He's this super wealthy, super prominent guy. He's essentially the inventor of modern advertising. He turned advertising from something in a newspaper that says we have six of these for sale at this much money. Here's our address to here's why you should buy this product. Albert Lasker is connected to the concept of the reason why in advertising. And he built brands to prominence that included some kissed, co-text, pepident, several others, lucky strike cigarettes, not always positive. He built lucky strikes by suggesting that women should smoke to stay thin. And essentially got women smoking when primarily men had been smoking cigarettes. But nevertheless, he is the king of advertising at the time. He also briefly owned the Chicago Cubs, recruited William Wrigley to come in as a co-owner and ends up selling to William Wrigley and christening the ballpark Wrigley Field. I mean, like this guy did a lot of things. And the other thing is he showed up in the news recently. In recent weeks, the Washington Post did a story about celebrity endorsements of presidential candidates because there was all this talk of Beyonce and Taylor Swift. So they looked back and found that it was Albert Lasker who invented the celebrity endorsement of presidential candidates. In 1920, he gets Mary Pickford and other Broadway and film stars to endorse Warren Harding, who wins. So very powerful influential man, but Jewish, so can't get into the golf clubs in Glencoe Highland Park Lake Forest. And what I said, I ride my bike through there. I ride my bike through there in part because I think Albert Lasker is this great story of, okay, then I will take the game elsewhere. So he builds a 480 acre estate, including his own full size golf course. Of course he did. Which in some articles you find was considered one of the top five golf courses in America at the time. Wow. And that's so all along the North Shore, a lot of those North Shore suburbs developed because of or around their golf courses. And he says, okay, you won't let me in, then I'll build my own. And mine will be very nice. Thank you. And mine will be amazing. And he builds about there are about 27 buildings on this estate. The primary building is his mansion, 50 room house, which is now for sale. I don't know who owned it between him and 1993. When his first wife died, he lived there for a while with a second wife. He ends up moving to New York. But in 1993, an orthopedic surgeon and his wife bought the house. It apparently was still in pretty much its 1920 condition. And when you look at the pictures, it is so grand. It's got, well, first of all, you drive up through a motor court, a gravel motor court. That's got this beautiful staircase. It's by David Adler, who was an architect of a lot of the grand mansions of lake forest and elsewhere on the North Shore. Really spectacular house. The Milgrams, the couple who are selling it, didn't talk to me. Their agent said that when they bought it in 1993, they paid about a million dollars. And now they're asking four and a half. They are asking a profit. A million dollars is about 2.7 in today's dollars. Just an amazing property. It's on about seven and a half acres. You don't have the 480 acres. When you pass through there, it's really interesting. There's like a couch house is now a house and other outbuildings from the estate are now houses. But there are also lots of houses built in the 70s, 80s, 90s, all on this piece of lake forest. And then you come to the gates of the Lasker mansion and you look through and see this beautiful French Renaissance building. And I think I said they're asking four and a half million for it. Yeah, again, head to Chicago business.com and see the pictures. It's quite a house indeed. All right. Well, you know, I always say every every chance I get, I say, I love when properties have like a cool story attached to it. And we have, I feel like that's kind of the theme this week. So let's stay with that theme. There is a condo. It is the Obama's first or we don't have his first condo, but it is a condo that the Obama's owned early in their marriage that they lived in when their children were born. It is on the market, but it is being sold by another layer of story because it's being sold by a jazz musician Kurt Elling and his spouse. So there's like story on story attached to this condo. There is. Yeah. And it's so it's not quite the Obama's honeymoon cottage. They've been married almost a year when they bought it. So the honeymoon was probably over, but sure, they bought it in 1993. They sold it in 2005. In that span of time, as you said, both their daughters were born. He wrote dreams from my father. He wrote the convention speech for 2004 that really sort of shot him into the national spotlight. And he was elected to both the Illinois Senate and later the US Senate. So this is a place where a lot of things happen for the Obama family. They sell it to Kurt Elling and his wife, Jennifer, and Kurt Elling told me this really interesting story. Kurt Elling is a very, very prominent jazz musician. He's got two Grammys. As I said in the story, he's 17 times been named male vocalist of the year by Downbeat magazine. Elling and his wife, Jennifer bought this in 2005. Again, Barack Obama's on his way up, but he's not the internationally known figure he is today. And Elling is at an open house at this condo, and he looks at a picture and says, "Oh, this is the guy who just got elected to the US Senate." And then when they close on the purchase, the seller shows up to say, "You know, this doorknob kind of sticks. You got to kind of jiggle this drawer and it's Barack Obama, future president of the United States of America." And then Kurt Elling, several years into ownership of this property, is chosen to perform at a White House at the first state dinner that... And Kurt Elling, several years into owning this property in early 2009, he bought it in 2005. He's tapped to perform at the Obama's first state dinner in 2009. And what he told me is Michelle, the first lady, said to Barack, the president, "Oh, so do you know that Kurt is the person who bought our old house?" And Barack said, "Yeah, I remember." Which I just... I was there. Just imagine, you know, you meet somebody at a cocktail party and say this, but no, you meet somebody at a state dinner at the White House and have this conversation. Anyway, so the Obama sold it to the Elings in 2005. They bought the mansion in Kenwood that most people associate them with. The Elings own the place. The Elings live in the place for about five years before they moved to New York and they keep it as a rental. They hold on to it as a rental. And I actually wrote about it when they first put it on the market as a rental in 2010. And it got snapped up by renters so fast that I couldn't get... Like I had an appointment to come see it the next day and it was already rented. So the story we wrote at the time I was at Chicago Magazine, the story we wrote was renters snapped this thing right up. And again, so this is 2010. It's during the Obama's presidency. It's in a strip in Hyde Park called Eastview Park. Faces looking East at the lake. It's a row of about 10 red brick three flats. They're all one homeowners association. And they share a big green space of their own and look out onto a very quiet piece of the park and then onto the Dusab Lake Shore Drive and then onto the lake. So it's like a fabulous location in Hyde Park. And so the Obama's had a four bedroom unit, the one that's now for sale. And a lot of the features in it, I was in it this week. A lot of the features are the same things I saw in 2010. There's this beautiful green tile fireplace. And we have a photo in the story, a portrait of Michelle was taken in the early 2000s, sitting in front of that fireplace. The kitchen is pretty much as they left it, although the walls were yellow at the time I went back to my story. And I saw we had a picture of the kitchen in 2010 with these yellow walls. And I linked to a picture of Michelle on the cover of Vogue in the same shade of yellow. The walls aren't yellow anymore. They're kind of a light blue. It's really it's a nice place. The Elings have put it on the market for $550,000. The unit next door also for bedrooms, no Obama connection sold for quite a bit more in 2022. So I think it's likely that I'm back here, if not next week, pretty soon to say the Obama's old condo sold for the first time since they sold it in 2005. Yeah. Well, let's keep the theme going of more properties with names attached to them. And this is a Bob Rorman, card dealership executive has bought the most expensive Arlington Heights house in a decade. Who was that Amy Bob? Who? You know, you want to say it, do it. No, I want you to say it. Bob Rorman. This is a member of Bob Rorman's family, Chase Rorman. Unfortunately, I wasn't able to determine what the exact relationship is because they didn't return my call. But Bob Rorman was, of course, a very well known car dealer in the Chicago landscape in part because of his commercials where he roared his name. But when he died in 2020, he left a chain of 23 dealerships in Wisconsin, primarily Illinois and Indiana, where he was native. And family members are now running it, one of them, Chase Rorman, again, I don't know the exact connection, just paid $2.25 million for a house in Arlington Heights. It's the highest priced home sale in Arlington Heights since late 2014 so just about a decade, a couple months shy of a decade, really nice property with an indoor pool. You saw the pictures, it's got nice beam ceiling family room and things like that, not the only house in Arlington Heights to sell for over $2 million, only a few in the past several years, but it's not, you know, you're not the only house at that level. The highest priced home is one that sold again in 2014 for $2.4 million. And in the years since then there have been, I think, four other sales at $2 million or more. This one was interesting because it sold quickly. It sold for second highest price or the highest since 2015. And it sold to a member of the Rorman family. You could not wait to do that. How many times do I get to roar on the podcast? I know, very few. When we get a moment to deviate from the usual conversation, like we go for it, right? We do. Well, there's one more house that I want to talk with you about, but then I want to kind of look at generally about kind of the upper end of the market because that seems also a theme today. But before we do that, let's talk about this $6 million house in Hinsdale. This is a house you and I have talked about not too long ago. It sold for $6 million. This is one. This is a historical house that a woman with a taste for historical rehab bought to keep it from being demolished. It was in bad shape, spent a long time on the market, etc. She bought it, rehabbed it, sold it for $6 million. We talked about that at the time. And now it turns out that it was bought by a really interesting family, the Ribeiro family, bought it through their company named Incobrasa. The Incobrasa company has been a big soybean producer. The Incobrasa company is in downstate in Gilman, Illinois. They've been a huge producer of oils and other products from soybeans for a couple of decades. And they recently had a groundbreaking with Governor Pritzker for a big expansion. And so now what we see is that the president of the company, a member of the Ribeiro family, buys this house for $6 million in Hinsdale. Once again, could not get them on the phone. I tried. I called the company, etc. We do know that the Ribeiro's have been in Hinsdale for a while. They're in a lot of articles about charitable events and things like that. And then they bought this house for $6 million. One of the things that's interesting about this is this generation, the family seems to be living in Hinsdale. The previous generation had downtown condos at Trump and Bloomingdale's. Those have both been sold. And now the head of the company, again, a different generation, is living in Hinsdale. Yeah. Once again, I'll say it, head to ChicagoBusiness.com and check out the photos, another very stylish home, indeed. Really, really nice house. Yeah. So we have talked about a lot of stuff kind of at the upper end of the market, a few way, way up at the upper end of the market. And last week, we were talking a little bit about how it was just kind of like one after another. And it was just like boom, boom, boom. Has that continued? Does that, I mean, it seems like that continues to be a thing. In the last couple of days, I've been able to relax. But throughout the summer, there was this constant parade of either listings at $10 million and up. And we have a story out. You've seen that lists the top 10 from $35 million. One in Winnetka, we discussed a couple of weeks ago down to 10.8 million. There are 10 properties that have come on the market at 10 million or more just since May. There had been four on the market. Highest price sale we've seen so far this year is 15 million. It's not that these are all coming on the market because there's been a huge amount of purchasing at that level. A couple of them, as you know, we've discussed before are estates of people who died. A couple of them are people who are downsizing because I raised my kids and now I don't need this grand estate. But really, we've seen, I mean, this has been quite a rush onto the market of $10 million and up properties, 15 million, 27 and a half million. These are some real signature properties. At the same time, in the course of 18 days, we saw six sales at $7 million or more. And again, the highest price sale we've seen is 15 million for the Parillo Palace in Lincoln Park. But to see six sales at $7 million or more in 18 days and in 18 days in summer, primarily August, is kind of unheard of. The most recent was the resale of Jason Hayward's own condo at number nine Walton. He sold it a couple of years ago for $7.2 million and the nameless people who bought it at the time, they bought it through a trust that I can't break through so I don't know who they are. They sold it for $7.3 million, bought it for $7.2, sold it for $7.3. That was the sixth property to sell for $7 million or more in the course of 18 days. I've been busy, but the market has been busy. People are putting these big ones on the market at $10 million about people are taking them off the market at $7 million and up several of the high end sales. As you know from our conversations have gone at massive discounts, that $15.2 million sale, the highest of the year so far, that had originally gone on the market at $50 million. And we have evidence that they had $65 million in it. Still painful to hear it. Every time you say it, I'm like, I can't even believe that I can pronounce those numbers, but it's not cringing. But some of them have sold for more than the asking price, Kerry Wood, as we discussed, sold his house for $100 more than his asking price, sold it for $8.5 million. But all in all, what we're seeing is just this incredible activity at the upper end of the market. One reason it stands out is that there's so little activity farther down in the market. That's not to say that even if a lot of people were buying $500, $600, $800,000 homes, it wouldn't be remarkable that so many of these high end homes have either come on the market or been sold. It's just that one of the things that draws the spotlight over there is there's so we're at record low sales for the market overall, but we're seeing all this activity up at the upper end. Well, I think it's probably a safe bet. Perhaps we will be talking more about this next week, but we will close for now. Thanks so much, Dennis. Always a pleasure. Thanks, Amy. Coming up, airlines may soon face cash penalties for delayed flights. We'll talk about that and more right after this. ♪ Want to dive deeper into the topics you've heard here? Read the full stories and get access to all of Crane's award-winning coverage with a Crane's Chicago Business subscription. Crane's daily gist listeners can get 20% off a one-year Crane's Chicago Business digital subscription by visiting ChicagoBusiness.com/GIST and using promo code GIST at checkout. Once again, to redeem this offer, visit ChicagoBusiness.com/GIST and enter code GIST to get this deal while it lasts. This is the Crane's daily gist with Amy Gu. The Michelin Guide added three Chicago restaurants to its list of recommended places to eat, teasing potential future recognition for the newcomers. The three restaurants are Anelia, a Ukrainian restaurant in the Avondale neighborhood, Bayonco, a Filipino Cuban restaurant in Ravenswood, and Beatty, a Lebanese spot in the Fulton Market District. Ali Marathi reported that the three restaurants are now listed under the new section of Michelin's website. They could also be contenders for Michelin's star, which is one of the highest honors in the restaurant world. A news release from Michelin also said that the restaurant's alternatively could be named to its BibGormand list, which features restaurants the company deems to serve high-quality food at a reasonable price. Marathi noted that last year Michelin added five new Chicago names to its BibGormand list in November, bringing the local total to 47. It revealed its star list for the city a few days later, adding a three-star restaurant to the roster with Smith in the West Loop. Two other Chicago restaurants, Atelier and Indiana, received a single star for the first time. Marathi further noted that Michelin changed its process for announcing stars last year. Previously, that announcement was made in the spring, and instead, Michelin unveiled the winners at an November ceremony in New York City. McDonald's is inching closer to a future where human cashiers aren't part of the picture. Bloomberg reported, citing people familiar with the new design option that the world's largest burger chain is rolling out a new format in the U.S. with digital ordering stations that can take cash and give change, allowing most customers to bypass the register entirely. Bloomberg noted that while the bulk of McDonald's locations already have kiosks, right now most customers who don't pay with cards have to line up at the counter to finish their transactions with the help of a worker. And McDonald says that human workers aren't going away, but the new model, which is only in a handful of restaurants, would further reduce the restaurant's reliance on human cashiers, who can be redeployed to other tasks such as bringing food to customers who request table service or curbside pickup. According to McDonald's, under the new look, screens behind the counter that normally display the full menu will instead highlight select items and encourage guests to order at the kiosk or on the mobile app. Bloomberg noted that customers who prefer to order at the counter can still do so, and full printed menus will be available upon request. The company said, quote, "These changes allow franchisees to meet our customers increased desire for digital options while improving speed and accuracy." The company said it doesn't have a timeline for a wider rollout, but said that for now the shift is optional for franchisees, who independently own and manage around 95% of McDonald's restaurants in the U.S. Bloomberg noted that the move is the latest sign of how mobile ordering is reshaping the U.S. fast food landscape. After skyrocketing during the pandemic, orders made via app delivery or kiosks accounted for more than 40% of McDonald's sales in top markets during last year's third quarter. Bloomberg noted that digital kiosks can speed up ordering, reducing the time that workers wait for customers to make a choice, which often involves stalling while searching the menu. While app users who get points that can be redeemed for free food tend to visit more frequently and order more add-ons like fries. But as Bloomberg also pointed out, the shift to digital is also remaking the nature of workers' jobs at McDonald's, a cornerstone of the U.S. labor market with over 2 million people at its franchised restaurants around the world. Southwest Airlines continues to reduce its flying at O'Hare. John Platts reported that the low-cost carrier is flying about 14 flights on peak days at O'Hare down from 18 in June. The cutback comes after a reduction in summer flying, which the carrier blamed in part on delays in getting new aircraft from Boeing. According to data from aviation research firm Serium, the new schedule is less than half the capacity Southwest was offering a year ago. The airline says the changes are in response to customer demand, but, quote, "we remain committed to serving our Chicago-area customers from the airport they prefer." Platts also noted that Southwest does most of its Chicago flying from Midway, where it's the dominant carrier, with more than 200 daily flights. Its capacity at Midway is about 10% lower than a year ago after pruning some routes and airports from its network. The Dallas-based airline that once set the standard for performance made headlines for one of the worst meltdowns in late 2022, which caused the company to rethink its operations. Now, it finds itself in the midst of a proxy battle with activist shareholder Elliot Investment Management. John Platts reported that Southwest Airlines' chairperson Gary Kelly is stepping down along with six directors, a dramatic move after the carrier faced calls for a strategic overhaul from the activist investor. Traditional, full-service rivals like Chicago-based United Airlines have found a way to compete on price as never before. Its dependence on Boeing and a single-type aircraft, once a strategic advantage, now limits Southwest's ability to grow. John Platts reported that DEAR is paying nearly $10 million to the U.S. Securities and Exchange Commission to resolve allegations that workers of a company it acquired seven years ago later bribed government officials in Thailand with cash, massage parlor visits, and international travel. The SEC says the activity by Wertgen Thailand, a subsidiary of a company DEAR purchased in 2017, violated the Foreign Corrupt Practices Act. Between 2017 and 2020, the SEC says Wertgen employs bribed officials with a Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads to win contracts that resulted in $4.3 million in profits for Moline-based DEAR. The agency said they also bribed workers at a private company. The SEC said the bribes were inaccurately recorded as legitimate expenses in DEAR's books and records. Platts noted that DEAR, which makes agriculture and construction equipment, did not admit or deny the SEC's findings but is paying $5.4 million in discouragement and interest, as well as a civil penalty of $4.5 million. DEAR said in a statement, quote, "Upon discovering these issues, we conducted a thorough internal investigation and fully cooperated with the SEC." Their statement continued, quote, "These allegations represent a clear violation of our company policies and ethical standards. Furthermore, they are in direct conflict with our core values, particularly our commitment to integrity and we strongly condemn such practices." The statement continued, quote, "The individuals involved in this matter are no longer with the company." If you've flown domestic in the U.S. in the last four years, you've likely faced at least one or two flight delays or cancellations, or worse, a complete system outage, and found yourself footing the bill without recourse from the airlines. But that may change. Bloomberg reported that the Biden administration is working on a proposed rule that would require U.S. airlines to provide compensation to passengers for controllable cancellations or delays of three hours or more. It may be issued as early as January 2025 and is expected to be a game changer for U.S. passengers and the U.S. aviation industry. Michael Negron, special assistant to the president for economic policy at the White House, speaking at a meeting in Washington on September 10, said, quote, "This is not radical. We are late to the game on this as a country." The proposed compensation scheme would mean U.S. airlines would have to pay a set cash payment amount to each passenger on a disrupted flight. In addition to compensation for meals and lodging. Bloomberg noted in reporting that the exact details and amounts are still being worked out. A similar framework has been in existence in the EU for the past 20 years, which is applicable to U.S. airlines when they operate internationally. EU rules require airlines to compensate travelers between $275 and $660 for controllable cancellations and extended delays, depending on the flight distance. Senator Edward Markey of Massachusetts, who serves on the U.S. Senate Committee on Commerce, Science and Transportation, said, quote, "When an airline cancels a flight because of mechanical or staffing issues, the passengers should receive compensation for their troubles." Reporting from Bloomberg also noted that passenger complaints against U.S. airlines have quadrupled in the past four years, reaching a record in 2023 with just more than 61,000 complaints filed. Theresa Murray, consumer watchdog director at the U.S. Public Interest Research Group, said, quote, "The complaints in 2023 increased by 29 percent, even though passenger volume increased by only 11 percent. That reflects how ticked off people are when they feel like things don't go well." And as Bloomberg noted, of those complaints, 35 percent were for flight issues, 20 percent related to refunds, and 16 percent related to baggage. Although Murray noted that overall cancellations have improved so far this year, as have on-time rates. Major U.S. airlines have different rules when it comes to how they handle delays. All 10 of them will re-book you on the same airline when your flight is disrupted or canceled and provide meals. 9 out of 10 will provide hotels and ground transportation, while just 6 will re-book you on another airline, and just 3 in 10 will provide a voucher. Currently, none pay cash for any kind of cancellation or delay. Bloomberg noted in reporting that the Biden administration's ultimate goal is to incentivize the airlines to provide better service. In Europe, flights have a higher on-time rate, which Negron from the White House says indicates there may be a strong correlation with the fact that the European airlines are required to compensate travelers. Last year, just 1 to 2 percent of all travelers were compensated due to disruptions. Air help data confirms. The latest discussion on air travel delay compensation comes on the heels of a slew of regulations under the Biden administration that have aimed to protect travelers and hold U.S. airlines more accountable. There's a clarification of travelers' rights on FlightRights.gov, a proposed rule to improve air access for passengers with disabilities, the recent rule requiring airlines to provide automatic and prompt refunds to passengers in the original form of payment, affirmed in the FAA Reauthorization Act, and the proposed rulemaking to impose a ban on family seating fees. That's Crane's Daily Jist for now. Check in on our continuous news feed at ChicagoBusiness.com. Thanks so much to today's guest, Crane's residential real estate reporter, Dennis Rodkin. You can follow all of our conversations on Apple Podcasts, Spotify, or wherever you like to get your audio on demand. Don't forget to subscribe and please rate and review Crane's Daily Jist. Our show is produced by Todd Manley at Earsight Studios. I'm Amy Gooth. Thanks so much for listening, and I'll meet you right back here next time.
